On 17 May 2017, the US Department of State announced that the US Government would renew waivers of certain sanctions necessary to continue to implement US commitments under the Joint Comprehensive Plan of Action (“JCPOA”). On the same day, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) designated additional parties for their involvement in Iran’s military and ballistic missile program.
If the Trump Administration had not renewed these Presidential waivers, the US Iran sanctions suspended under the JCPOA would have snapped back into force. While allowing the Presidential waivers to lapse may not in itself constitute a breach of the JCPOA, the US Government resuming the application of the US sanctions would likely be viewed by the Iranians as a breach. For more information on these Presidential waivers and the Trump Administration’s review of the US Government policy on Iran, please see our earlier blog post here.
With this announcement, the State Department insisted that issuing the waivers “does not diminish the United States’ resolve to continue countering Iran’s destabilizing activity in the region, whether it be supporting the Assad regime, backing terrorist organizations like Hezbollah, or supporting violent militias that undermine governments in Iraq and Yemen. And above all, the United States will never allow the regime in Iran to acquire a nuclear weapon.” The State Department also expressed its concerns about Iran’s continuing violation of human rights by simultaneously issuing a semi-annual report mandated by the US Congress regarding sanctions imposed on parties involved in human rights abuses in Iran.
The State Department’s actions coincided with an announcement from OFAC that it was designating as Specially Designated Nationals (“SDNs”) seven (7) individuals and entities in connection with Iran’s ballistic missile program, including two (2) senior Iranian defense officials and a China-based network alleged to be supplying Iran’s military and ballistic missile program. Additional information on these designations is available in OFAC’s Press Release. “US Persons” (i.e., (i) US citizens and permanent resident aliens / Green Card holders, wherever located or employed; (ii) entities organized under US laws and their non-US branches; and (iii) any parties physically located in the United States, even temporarily) are prohibited from directly or indirectly dealing with these SDNs as well as any entities 50% or more owned by one or more SDNs. Any property of such SDNs must be blocked (i.e., “frozen”) if it comes within the possession or control of a US Person or within the United States.